Tram auditors not told of project delays, inquiry hears

DETAILS of delays to the tram project were withheld from Audit Scotland when they carried out a review before a crucial vote in the Scottish Parliament, the tram inquiry has heard.

Graeme Greenhill, senior manager at the spending watchdog, said he was not told about slippage in design work and the diversion of utilities when he carried out the review in June 2007.

The inquiry, chaired by Lord Hardie, heard that at that stage there was already some design slippage and the completion date for utility diversion works had also slipped from May/June 2008 to November 2008.

The inquiry was shown email correspondence between staff at TIE, the council’s arms length company in charge of the project, which discussed a slide presentation prepared for the auditors.

Project director Matthew Crosse said in the first email the aim of the briefing was “to summarise what is happening and convey confidence that we have a plan and achieving the plan, albeit with some challenges”.

Engineering director David Crawley circulated some slides, but then Stewart McGarrity, TIE’s finance manager, wrote: “The really direct questions that you need to prepare for are: one, has the design gone according to programme so far, if not why not? Secondly: what has changed which gives you confidence the design process will deliver to the procurement programme now on the table?”

But in a final email Mr Crosse said: “I think we should stick with current pack. The last two new slides beg a lot of questions. If they want to understand more about current and past progress, we can respond when asked.”

Asked his view of the failure to disclose the details, Mr Greenhill said: “Are you suggesting TIE deliberately withheld information? I think that could be one interpretation of that email traffic.

“We would obviously take a dim view of that. In my experience, I have never been aware of that happening.”

The Audit Scotland review was published on June 20, 2007, after being requested just 16 days earlier by the then Finance Secretary John Swinney.

It referred to slippage in the infrastructure procurement but there was no mention of delays in design or utilities diversion.

The review gave the project a clean bill of health, saying the arrangements in place to manage it appeared sound.

The Scottish Parliament voted a week later to allow the tram project to go ahead despite SNP attempts to scrap it.

Mr Greenhill said the speed with which the report on the trams was produced was unprecedented. Audit Scotland reports normally took months.

And he acknowledged there were some matters not covered by the review which would have been examined if they had been doing a full report.

“We needed to keep the review high level - and very focused, looking at the management arrangements within TIE principally.”

He also revealed that most of the documents from the review had been destroyed because Audit Scotland’s retention policy only required them to be kept for six years.

Earlier, a trams expert who conducted reviews of the Edinburgh project told the inquiry Transport Scotland’s withdrawal from direct involvement was a positive move.

The Scottish Government has been criticised for taking its transport agency off the bodies overseeing the tram project in 2007 after the SNP failed in its bid to scrap the scheme.

But Mike Heath, former project manager for the Croydon trams and part of a team which carried out a series of reviews of the Capital’s project, said he viewed the move, leaving the city council solely responsible, as a good thing.

He told the inquiry: “Having a single body that was responsible for delivery was absolutely a move in the right direction.

“I thought Transport Scotland withdrawal - this is a personal opinion - was positive for the project because of the risks of having a project reporting to two different groups of people with two potentially diverging sets of objectives.

“If you remove that risk by getting Transport Scotland to behave as an independent funder, overseeing its investment, that produces some certainty that would not be there if they were part of project teams.

“I do understand there was some expertise within Transport Scotland that could have assisted the project later on when it got into difficulty, but that could have been done offline.

“From a basic set of arrangements between the parties I thought Transport Scotland taking a very clear, clinical view as a funder was the best thing that could have happened.”

Mr Heath conducted a series of reviews between 2006 and 2010 as part of a team from the Office of Government Commerce, which gives procurement guidance to pubic sector organisations.

A review in 2008 recommended that TIE management should consider “whether it has sufficient legal skills to fully understand and execute the contract on a daily basis”.

Mr Heath said TIE had said they were going to manage the contract on a “light touch” basis. But he said: “We had a look at a couple of the provisions and they didn’t exactly lend themselves to a light touch.”

Other problems he identified with the project included too many changes in senior personnel; a failure to get a common understanding between the parties about the infrastructure contract, which meant the relationship between TIE and the contractor became “unsustainable”; and the contractor being “ill -prepared for the task”.

He added: “Because there was never a realistic programme, decisions appear to have been made to reach an impossible deadline without alerting that it was unlikely to be achieved from the outset.”

Asked with hindsight what might have improved the project, he said among changes which would have helped were a less adversarial approach, better oversight of TIE and tighter control of utility diversion works.

He said utility works in Croydon had been completed on time and within budget.

“We left the utilities to do their own works, agreed a sum with them and had a consultant advising and co-ordinating. We had just one of my staff managing, liaising and dealing with health and safety.

“We learned early on if you keep most of the management out of the process the guys on the ground are much more effective at getting in with it than having a large number of people turning up now and again and telling them how to do it.”

And he said there had been good relationships on the project.

“The moment you start talking about ‘the contractual process’ it’s the men in suits - and once that happens it doesn’t usually speed things up.”

But he acknowledged central Croydon was not as complex as central Edinburgh.

“We may have been a bit more lucky than apparently in Edinburgh that we were able to pretty much identify all the key utilities that needed moving.”